John Gruber's toldjasos and youmustbejokings were interrupted only by Jobs stressing that Apple and Adobe (who makes and markets the ubiquitous player) maintain good relations, so potential enough remains to feed the rumor-mill for posts to come.

However, it's worth remembering that:

Flash is a notorious resource hog on OS X and Adobe has never really addressed this for the desktop

Regardless of its ubiquity Flash remains a proprietary standard and Apple has stressed open standards (like AJaX for MobileSafari)

And perhaps most importantly, Flash is a competitor to Apple's (admittedly languishing) QuickTime and Apple could very well be preparing to put some of their sudden mobile browsing penetration behind their own product rather than just handing Adobe the space.

Personally, as a pro web developer who uses Flash routinely, I'm kind of happy that the iPhone doesn't support it. Far too often it's misused more than used (not even counting the insipid monkey-punch banners). Several times I've rethought architecture to swap out Flash and swap in AJaX after looking at a beta on the iPhone.
All-Flash sites are more often than not poor design, IMHO, poor accessibility and poor usability, and I really hope the consortium comes up with an open standards based video container similar to the tag, so we can keep proprietary formats as marginalized as possible.